Referrals, we are told from our first day on the job, are the best prospecting tool in any salesperson’s toolbox. According to sales legend, the path to top-producer status is paved with referrals. Yet, the truth is that very few salespeople generate many high-quality referrals.
And then there are those who get a few names and phone numbers here and there. Unfortunately, most of these “referrals” don’t turn into sales. For most salespeople, trying to get referrals can be so disappointing they stop asking altogether. These salespeople conclude that referrals are just a myth, that they aren’t worth the time and effort it takes to get them.
In reality, the problem lies not with referrals in general or with your clients in particular. The problem lies in how you ask for referrals. Here are five of the top referral mistakes salespeople make:
- Not asking. It shouldn’t come as a terribly big surprise that if you don’t ask for referrals, you won’t get them. Almost 70 percent of salespeople never ask for a referral. Of course referrals are a myth for them! How can you expect to get something if you never even try? Those who don’t ask have a legion of excuses — their clients don’t know anyone, are too busy, will be annoyed. Salespeople don’t ask because they are afraid of asking, pure and simple.
- Asking only once. Studies have shown that salespeople who do ask generally do so only once. Certainly, asking once is better than not asking at all. But statistically, asking once generates 1.47 referrals from each client. Salespeople who ask twice, however, receive 2.03 referrals. This means that for every 10 customers asked, the salesperson who asks once will get 14 referrals, while the salesperson who asks twice will get 20 — almost 50 percent more. And those who had the temerity to ask a third time? They received on average 3.28 referrals, more than three times what asking only once produced.
- Suggesting instead of asking. Many salespeople “suggest” a client give them a referral instead of directly asking for it. Instead of making a direct request, they try to soft peddle by saying something such as “Mr. Client, if you happen to run across someone who could use my product or service, would you give her my card?” This is the chicken’s way out. These salespeople don’t want to offend, so they don’t ask directly.
- Waiting until the sale is complete to bring up referrals. Most salespeople who do ask wait until the sale is complete before they bring up the subject of referrals. Many salespeople have learned from experience that asking for referrals makes their clients uncomfortable. But this is not because the request itself is an intrusion. Rather, it’s the timing of the request: The sale is complete — it’s over. The client has already mentally moved on to other issues. They’re simply waiting for the salesperson to leave so they can get back to other business. And — bam — here comes a request that tries to pull them back into the sale. What would have been a simple request has now become an intrusion.
- Focusing on their needs, not the client’s. The typical referral request goes something like this: “Mr. Client, let me ask a favor: It would really help me if you could give me the names and numbers of a couple of people I might be able to help.” Clients don’t give referrals because they like you, because they respect you or even because you have done a good job. By and large, clients will give referrals because they perceive it to be in their interest to do so. Your client must want to give you a referral.
No matter what you sell, whether you sell to individuals or businesses or how much your product or service costs, you can build a referral-based business with the right approach.
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Paul McCord is a best-selling author, speaker and leading authority on lead generation. He has more than 20 years’ experience coaching and mentoring salespeople. For more information, go to mccordandassociates.com.